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What companies use variable costing?
Variable costing is commonly used by companies in industries where production costs fluctuate significantly, such as manufacturing and retail. Companies like General Motors and Ford may utilize variable costing for internal decision-making and performance evaluation. Additionally, businesses in the food industry, like fast-food chains, often adopt this approach to assess product profitability and manage inventory costs effectively. Variable costing helps these companies analyze their contributions to fixed costs and overall profitability.
Would you recommend variable costing or absorption costing as a source of information for managers?
I would recommend variable costing for managerial decision-making because it provides clearer insights into the impact of variable costs on profitability. This method helps managers understand how changes in production volume affect costs and profits, facilitating better budgeting and performance evaluation. Absorption costing, while useful for external reporting, can obscure the relationship between fixed costs and production levels, potentially leading to less informed decisions. Therefore, for internal management purposes, variable costing is generally more effective.
Are variable selling expenses relevant?
Yes, variable selling expenses are relevant in decision-making processes, particularly in scenarios like pricing, product line evaluations, and cost analysis. Since these expenses fluctuate with sales volume, they directly impact profitability and should be considered when assessing the financial implications of different business choices. Ignoring them could lead to inaccurate assessments of overall costs and profitability.
Must be subtracted from sales to reach the contribution margin?
To reach the contribution margin, variable costs must be subtracted from sales revenue. These variable costs include expenses that fluctuate with production levels, such as direct materials, direct labor, and variable manufacturing overhead. The contribution margin represents the portion of sales revenue that contributes to covering fixed costs and generating profit. Thus, understanding and managing these variable costs is crucial for assessing profitability.
What is true variable cost?
True variable cost refers to expenses that change directly with the level of production or sales volume. Unlike fixed costs, which remain constant regardless of output, true variable costs fluctuate in direct proportion to the amount produced or sold, such as raw materials, direct labor, and sales commissions. Understanding true variable costs is crucial for businesses to accurately assess profitability and make informed pricing and production decisions.
What is an intervening variable?
An intervening variable is an internal state that is hypothetical in empirical research. It explains the relationships between variables being observed.
What is an interdependent variable?
An intervening variable is an internal state that is hypothetical in empirical research. It explains the relationships between variables being observed.
What are interfering variables?
An intervening variable is a hypothetical internal state that is used to explain relationships between observed variables
What is an example of intervening variable?
An example of an intervening variable is stress, which can impact the relationship between hours of sleep and academic performance. In this case, stress mediates the relationship by influencing both the amount of sleep a person gets and their academic performance.
Intervening variable can be measured?
Intervening variables cannot be directly measured because they are theoretical constructs that explain the relationship between the independent and dependent variables in a study. Their impact is inferred based on the relationship between the variables of interest.
How do variable costs impact the overall profitability of a business?
Variable costs directly impact the overall profitability of a business by increasing or decreasing based on the level of production or sales. When variable costs rise, it reduces the profit margin, while lower variable costs can lead to higher profits. Managing variable costs effectively is crucial for maximizing profitability in a business.
What companies use variable costing?
Variable costing is commonly used by companies in industries where production costs fluctuate significantly, such as manufacturing and retail. Companies like General Motors and Ford may utilize variable costing for internal decision-making and performance evaluation. Additionally, businesses in the food industry, like fast-food chains, often adopt this approach to assess product profitability and manage inventory costs effectively. Variable costing helps these companies analyze their contributions to fixed costs and overall profitability.
If you open the faucet then it will increase the flow of water what is confonunding and intervening variable in this example?
if i open the faucet, then it will increase the flow of water?
Is there an internal variable for an object's speed in Game Maker?
Yes, the internal variable for an object's speed in Game Maker is <Object_Name>.speed.
What is the difference between moderating and extraneous variables?
Extraneous variable a.k.a. Confounding vaiable is a variable that affects an independent variable n also afects a dependent variable at d same time confounding relatnship btn the independent and dependent variable. Mediating variable a.k.a. Intervening variable, it is a variable forming a link btn two variables that are causualy conected.
What are the advantages of using variable costing for internal reporting purposes?
Variable costing offers several advantages for internal reporting, including clearer insights into cost behavior by separating fixed and variable costs. This distinction helps management make more informed decisions regarding pricing, budgeting, and operational efficiency. Additionally, variable costing facilitates better performance evaluation by linking costs directly to production levels, allowing for a more accurate assessment of profitability. Lastly, it enhances forecasting and planning by highlighting how costs will change with varying production volumes.
Make up three situations in which motivation to work would be an independent variable an intervening variable and a moderating variable?
motivation to work is a moderating varaible , because it is not aleways consisitent adn there are various factors which go about in making a person work
